Seoul: The US Supreme Court’s decision to strike down President Donald Trump’s emergency “reciprocal” tariffs has raised fresh uncertainty for South Korea’s trade outlook, according to experts on Saturday, though major Korean companies are unlikely to make abrupt changes to their U.S. investment strategies.
The U.S. court ruled against Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to justify the reciprocal tariffs and other IEEPA duties, prompting questions over the trade deals that the Trump administration has secured with the duties as a pivotal negotiating tool.
In a swift response to the court decision, Trump signed an order the same day imposing a new 10 percent “global tariff” on all countries under Section 122 of the 1974 Trade Act, reports Yonhap news agency.
Yoon Sang-ha, head of the international macroeconomics team at the Korea Institute for International Economic Policy, said a period of short-term disruption would be difficult to avoid following the latest developments.
“Over the past year, companies have made decisions based on the reciprocal tariff structure and the South Korea-U.S. agreement,” Yoon said. “If that legal basis changes, firms will face confusion over what standards to follow.”
Even if the U.S. administration restores tariffs through other mechanisms, the range of affected products and the applicable rates remain unclear, said Yoon, noting uncertainty could delay investment and export decisions.
“When uncertainty grows, companies tend to pause decision-making, which can weigh on investment, exports and overall economic activity,” Yoon added.
Chung Ji-young, an emeritus professor of international trade at Jeonbuk National University, expressed a similar view.
“The biggest challenge is unpredictability,” Chung said, noting that policy volatility itself has become a key risk factor. He expressed confidence that Korean firms possess the capacity to respond flexibly under such shifting conditions.
Experts at major South Korean trade groups echoed that view, stressing that tariff policy remains an external variable beyond corporate control.
Kim Hyun-soo, head of the economic policy team at the Korea Chamber of Commerce and Industry, said companies will have to adjust internally once Washington’s policy direction becomes clearer.
“Tariffs are an external factor. Firms have little choice but to adapt their management strategies and costs according to whatever decision is made,” Kim said.
He called for closer communication between Seoul and Washington to minimise uncertainty and help businesses make timely decisions.
Ryu Sung-won, head of the industrial innovation team at the Federation of Korean Industries, ruled out the likelihood of a dramatic shift in Korean firms’ U.S. operations.
Ryu added that Seoul could leverage Korea’s industrial strengths in future trade negotiations.
The Trump administration levied reciprocal tariffs of 15 percent on South Korean products, down from 25 percent following a bilateral deal under which Seoul has committed to investing US$350 billion in the United States, among other pledges, in return for the tariff reduction.
(IANS)
